Mr O'Neill said extending the ban would allow governments to do more.
Under PNG law, a vote of no confidence currently cannot be called in the first 18 months and the last year of a government's five-year term.
"Those are options that the coalition partners agreed to in Alotau, and we've passed those issues over to the attorney general's office and other agencies responsible for drafting our legislation," Mr O'Neill told AAP.
"What we want to do is create a stable environment where governments in the future can have an opportunity to carry out the policies that they commit to the nation during elections.
"We feel strongly that 18 months is too short for any government to work, and for a government to be judged by the people on its performance (it) must be given time to do so."
Following the 2012 election, Mr O'Neill and more than 80 of PNG's 111-strong parliament agreed to a series of reforms known as the Alotau accords, named after the town in Milne Bay where MPs gathered to support Mr O'Neill's bid for the prime ministership.
Opposition leader Belden Namah, acting opposition leader Sam Basil and representatives of their PNG Party could not be contacted for comment.
The government of former PM Sir Michael Somare tried and failed to extend the grace period to 36 months after it was elected in 2002.
There have been three successful no-confidence motions in Papua New Guinea.
In 1980 and 1985 Sir Michael Somare was ousted as PM following no-confidence votes.
Following the 1985 vote, Paias Wingti, then 34, became the youngest prime minister in the Commonwealth but he subsequently lost a vote of no confidence in 1988.
AAP
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